Financial services lobbyists are going on the offensive trying to force significant concessions to the financial regulatory overhaul making its way through the Senate.
The renewed push comes as the House Financial Services Committee, chaired by Rep. Barney Frank (D-Mass.), cleared the way Wednesday for its version of the legislation to move forward to a full House vote that could come as early as next week.
While the House Financial Services panel worked on sections of the bill separately, the Senate Banking, Housing and Urban Affairs Committee is reviewing the overhaul legislation in its entirety.
The effect has been a full-court lobbying press as banks, financial services associations and other groups that lend money are still trying to make headway on minimizing the breadth of the law.
But consumer activists are continuing to push back against changes to the legislation Banking Chairman Chris Dodd (D-Conn.) introduced earlier this month.
“The big message is stay strong,’— said Heather Booth, campaign director of Americans for Financial Reform. “The public wants to know — are their elected Representatives siding with Main Street or are they siding with Wall Street.—
That hasn’t stopped the lobbying bonanza of insiders.
Financial services lobbyists acknowledge they got a major opportunity after Dodd stepped back from his liberal proposal and opted to assign bipartisan duos on the Banking panel to try to make headway on main chapters of the legislation.
The lawmakers are slated to report their progress to Dodd this week.
Dodd and Banking ranking member Richard Shelby (R-Ala.) are negotiating on two of the most contentious points in the legislation: the new consumer protection agency and which banking agencies will be consolidated.
Even if the bipartisan negotiations fail, banking lobbyists said it is unlikely that Dodd would be able to move forward with a markup of the legislation before the holidays.
As the lobbying effort has shifted from the House, lobbyists say they are focused less on grass-roots outreach and more on individual conversations with Senators and their staffs.
Banking lobbyists said they were approaching the political dynamic as an “informal markup— until Dodd announces a time frame for moving a bill forward. Lobbyists are using the time to look for backers to amendments they favor. Key targets include moderate Democrats such as Sens. Mark Warner (Va.), Jon Tester (Mont.) and Evan Bayh (Ind.).
The Consumer Financial Protection Agency remains a key breaking point for the financial services industry.
The U.S. Chamber of Commerce is continuing its drum beat against the CFPA. The chamber sent a letter Wednesday, signed by more than 2,100 chambers of commerce, associations and other businesses urging Congress to keep consumer protection within existing regulatory agencies.
“Broad definitions and vague regulatory standards would give the CFPA unending jurisdiction and unchecked power, exposing businesses to both its regulatory authority and the litigation exposure that comes with it,— the chamber wrote. “The agency takes a one-size-fits-all approach to consumer protection that ignores the fact that small businesses often use consumer financial products to supplement inadequate business lines of credit and to meet short-term capital needs.—
Credit unions and community banks have also been pushing for an exemption from the consumer protection agency.
“We’ve been pretty clear that we continue to oppose CFPA for credit unions since we didn’t cause this crisis,— said Dan Berger of the National Association of Federal Credit Unions.
NAFCU has been lobbying against the CFPA with grass-roots letters and calls and has had a fly-in of its members to make the case to lawmakers in person.
The Independent Community Bankers of America has also been speaking out against the consumer protection agency.
“The CFPA really needs substantial improvement,— said Steve Verdier, a lobbyist with the group.
Other industries, including auto dealers and trade schools, are fighting for carve-outs from the CFPA.
AFR’s Booth said it is important that the CFPA remains an independent agency.
“Nothing has fundamentally changed in the operations of the largest banks and the organization of the financial industry that led to this crisis,— Booth said.